Mauritius Government Announces Tax Changes, Measures To Benefit Finance Sector In Budget
by Lorys Charalambous, Tax-News.com, Cyprus
19 June 2008
The Government of Mauritius has, through its recent 2008-09 Budget, implemented a series of measures to facilitate and encourage financial institutions to deliver services efficiently, and to help the financial services sector maintain its dynamism.
Among these were:
- Legislation to help financial institutions carry out cross border transactions
in a wider range of products and to facilitate hedging which businesses can
use to reduce currency exchange risks.
- Amendments to banking, financial, business and land legislation to improve
compliance and enhance the reputation of the financial services system.
- The financial leasing activities of commercial banks, presently being regulated
by both the Bank of Mauritius and the Financial Services Commission, will henceforth be regulated only by the Bank of Mauritius, to avoid duplication of activities.
- A regulatory framework will be established for leasing companies to market products that are
shariah compliant.
- A regulatory framework will be established for the setting up and the regulation of activities
of Real Estate Investment Trusts in Mauritius.
Measures introduced pertaining to income tax, meanwhile, included:
- Adjustment to the income tax threshold, increasing the exemption by Rs25,000 in respect of all four previous categories of tax payers.
- Introduction of two special income exemption thresholds for retired persons
who have reached the statutory retirement age and stopped working.
Changes to excise Duties and other taxes introduced in the Budget meant that:
- Several items are shifted from Customs duty to Excise duty at the same rate,
with a view to improving WTO compliance.
- As from 1st July 2008, excise will be due for both locally manufactured goods
and imported products upon the validation of the declaration at customs.
- Customs duty is abolished on almost all foodstuffs and reduced on certain
stationery products as well as on several items used in construction.
- Tariff cuts on spare parts, accessories for motor vehicles are extended
to 0% and tariffs are abolished on renewable energy related spare parts and
items pertaining to photo voltaic cells.
- Customs duty has been removed on double space cabin vehicles without rear
bed-caisson and all single cabin vehicles for specific economic operators.
- New rates of land transfer tax are being introduced for large transactions
where land value exceeds Rs50m.
- Pharmaceuticals products are being zero rated for VAT purposes.
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